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drummnutt, this is my understanding of the PBG business. I could be wrong, but the SP of PBG is driven, not by fundamentals but by sentiment alone. The whole basis of their business is to buy some good brands and trade on these brands. A normal business used borrowed funds to buy assets like building or equipment etc. PBG used the borrowed funds to buy intangibles, market share, management expertise and well known brand.The rag trade mainly rely on leverage to fund its business.I do agree with you that the market look at this funding as being overleverage, but this is how the whole business model worked.If the leverage is low, so does the return of capital. It is unusual that the funding is low in the textile trade, especially the branded goods where there is a bigger margin to service royalties and the loan.Reaching $1-$1.50 in 18-24 months is not out of the question, as I said,sentiment drives the market and if the market settles down earlier, PBG will find reach this target a lot earlier.I have traded textile shares like JST and SFH for some time and do you really think that I am over optimistic that arriving at this SP at an earlier date is not possible.In the valuation of a company, if we lool at it as not a going concern, then we look at the realisable tangible assets. On the other hand, if it is a going concern and the business is run profitably, the the future earning of a compamy is to be taken into consideration. Maybe you may know something about PBG that I don't.Whilst I appreciate your ability to pick a company that you think is undervalue, however I find it hard to believe anything over the SP of 40c is overvalue currently.This is your point of view and the fact that CBA has reduced their shareholding may add weight to your argument. I have on the other hand been averaging up my stakes than down, so I do agree with your long term view.Even, if my average SP is 60c which is 50% more than your valuation of a conservative 40c, it is still a return of 150% in two years.The current SP of PBG, whilst is still volatile, is telling a different story.PBG was one of the top three performing stock on the ASX last week, perhaps my optimistic outlook is not limited to my own thinking but share by others. It is good to be conservative and prudent and I do not disagree with your approach.
PS disclaimer: everyone's situation is different so please dyor before trading in this speculative share or better still talk to your financial adviser.My assumptions or the information I obtained is not necessary correct as I based it on research available in the market place or from the company.